Interest rates in India, the world's second-fastest growing major economy, have been on an upward trend after RBI increased key rates six times in just over a one year to tame inflation and cool down certain sectors such as real estate.

Kamath, however, said if interest rates continued to rise they can put pressure on the economy.

"I believe economic fundamentals in India are strong," he said.

Referring to the surge in rupee against the dollar, he said: "As long as inflow exceeds outflow there would be pressure on rupee to appreciate."

The Indian currency has risen nearly 14 per cent against the greenback since August 2006. Although the appreciation is hurting exporters, it is also making imports cheaper and helping control rising prices.